Date
21 October 2017
Leung Chun-ying (left) says Link REIT 'has a particular corporate social responsibility because it serves the needs of public rental housing tenants', but Hubert Chak begs to differ. Photos: CNSA, HKEJ
Leung Chun-ying (left) says Link REIT 'has a particular corporate social responsibility because it serves the needs of public rental housing tenants', but Hubert Chak begs to differ. Photos: CNSA, HKEJ

Social responsibility isn’t social welfare: Link REIT

Hubert Chak, finance director of Link Real Estate Investment Trust (00823.HK), said Wednesday the firm has been doing its best to be socially responsible, the Hong Kong Economic Journal reported.

But Chak warned against confusing corporate social responsibility with social welfare.

His remarks were in response to criticism by Chief Executive Leung Chun-ying, who told the South China Morning Post in an interview, “The Link has a particular corporate social responsibility because it serves the needs of public rental housing tenants.”

Leung said the government has never promised the Link a monopoly of the shopping mall business in public housing estates.

Soon after the interview was published Wednesday, Link hit back, saying it has never been a developer and most of its income is from rent.

At a news conference Wednesday morning, Chak said only 78 out of more than 200 wet markets in Hong Kong, or 39 percent, are operated by Link REIT.

The retail space Link controls accounts for only 8 percent of the total in the city, he said.

As to Leung’s suggestion that the Link may be tying its incentive packages for managers to rental income, which may encourage them to seek rents that are as high as possible, Chak said the management’s remuneration is based on multiple financial and non-financial factors, and none of them is directly linked to rents.

In response to criticism from the public that the Link is a bloodsucker because it has raised rents to outrageous levels, Chak defended its rent hikes by saying rental income has accounted for about 11 percent of annual revenues over the past seven or eight years, a proportion that is lower than in the market as a whole.

Lo Bing-chung, Link REIT’s director of corporate communications and external relations, said it would welcome a government buy-back of its shares.

The firm will seek ways to strengthen communication with the government, Lo said.

Link REIT, which began operations in 2005, has been slammed for its merciless and profiteering business practices, including causing hardship for operators of small stores by selling some of its properties to speculators, outsourcing management of wet markets and demanding higher rents, prompting a furious protest led by several pan-democratic groups in April.

Media reported earlier that Chief Secretary Carrie Lam Cheng Yuet-ngor has targeted Link as one of the “three mountains” that the government has to conquer, the other two being MTR fare increases and the Mandatory Provident Fund’s rules.

Lam denied that she had said that but revealed she is scheduled to meet with Link REIT’s chief executive, George Hongchoy Kwok-lung, in July.

[Chinese version 中文版]

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